CNH



(26.89% stake, 41.68% of voting rights on issued capital)



Key consolidated figures of CNH Industrial for the first half of 2021 as follows:

 I Half 
$ million 2021 2020 Change
Revenues 16,382 11,012 5,370
Revenues in € 13,592 9,993 3,599
Adjusted EBIT of Industrial Activities(1) 1,211 (283) 1,494
Net (loss) income 979 (1,294) 2,273
of which attributable to owners of the parent 952 (1,206) 2,158
Net Industrial Debt(2) 882 297 585
(1) Adjusted EBIT is a non-GAAP financial measure used to measure performance. Adjusted EBIT is defined as profit/(loss) before taxes, financial services results, industrial activities financial expenses, restructuring costs and certain non- recurring items. (2) Net Industrial debt is defined as net debt excluding the funded portion of the sell-liquidating financial receivables portfolio. Comparative data refer to 31 December 2020.

Covid-19

The COVID-19 pandemic and the related actions of governments and other authorities to contain COVID-19 spread continue to affect CNH Industrial’s business, results, cash flow and outlook. Governments in many countries where the CNH Industrial operates designated part of its businesses as essential critical infrastructure businesses. This designation allows CNH Industrial to operate in support of its dealers and customers to the extent possible. CNH Industrial also continues to prioritize the health, safety and well-being of its employees. 

Rising demand is adding pressure to the supply chain, requiring diligent coordination to keep production at desired levels. Adverse market trends in raw materials (particularly steel), freight and logistics costs have impacted its product cost performance in the first half of 2021.

CNH Industrial remains cautious about future impacts on CNH Industrial's end-markets and business operations of restrictions on social interactions and business operations to limit the resurgence of the pandemic. CNH Industrial is closely monitoring the impact of the COVID-19 pandemic on all aspects of its business, its employees and its results of operations, financial condition and cash flows in 2021.

Revenues

Net revenues were $16,382 million in the first half of 2021, an increase of 48.8% compared to the six months of the first half 2020 (up 43.2% on a constant currency basis). Net revenues of Industrial Activities were $15,553 million in first half of 2021, an increase of 53.4% (up 47.4% on a constant currency basis) compared to the first half of 2020, due to higher volumes driven by strong industry demand together with favorable price realization.

Net revenues for Agriculture were $7,018 million for the first half of 2021, an increase of 46.8% compared to the first half of 2020 (up 43.5% on a constant currency basis). The increase was due to higher industry demand, better mix, and favorable price realization.

Net revenues for Construction were $1,464 million in the first half of 2021, an increase of 73.9% compared to the first half of 2020 (up 70.7% on a constant currency basis), as a result of higher volumes driven by industry demand, channel destocking actions in 2020, and better price realization.

Net revenues for Commercial and Specialty Vehicles were $6,029 million in the first half of 2021, an increase of 60.4% compared to the first half of 2020 (up 51.2% on a constant currency basis), primarily driven by higher truck volumes.

Net revenues for Powertrain were $2,526 million in the first half of 2021, an increase of 66.6% compared to the first half of 2020 (up 56.3% on a constant currency basis), due to higher sales volume. Sales to external customers accounted for 44% of total net revenues (53% in the first half of 2020).

Net revenues for Financial Services totaled $884 million in the first half of, 2021, a decline of 4.4% compared to the first half of, 2020 (down 5.4% on a constant currency basis), primarily due to a lower average portfolio in North America and lower off-lease equipment sales, partially offset by positive impact from currency translation.

 I Half 
$ million 2021 2020 % change
Agriculture 7,018 4,780 46.8
Construction 1,464 842 73.9
Commercial and Specialty Vehicles 6,029 3,759 60.4
Powertrain 2,526 1,516 66.6
Elimination and other (1,484) (757) n.s.
Total Industrial Activities 15,553 10,140 53.4
Financial Services 884 925 -4.4
Eliminations and other (55) (53) n.s.
Revenues 16,382 11,012 48.8

Adjusted EBIT of Industrial Activities

Adjusted EBIT of Industrial Activities was $1,211 million in the first half of 2021, compared to an adjusted EBIT loss of $283 million during the first half of 2020. The increase in adjusted EBIT was primarily attributable to all segments being up year over year.

Adjusted EBIT of Agriculture was $963 million in the first half of 2021, an increase of $734 million compared to the first half of 2020. The increase was driven by higher volumes, favorable mix, and positive price realization, partially offset by higher raw material and freight costs, and SG&A and R&D costs returning to more normal levels from the low levels experienced in the previous year. Adjusted EBIT margin was 13.7% (4.8% in the first half of 2020).

Adjusted EBIT of Construction was $47 million in the first half of 2021, an increase of $216 million compared to the first half of 2020. The improvement was due to favorable volume and mix, positive price realization, and positive fixed cost absorption, partially offset by higher material and freight costs. Adjusted EBIT margin at 3.2%.

Adjusted EBIT of Commercial and Specialty Vehicles was $184 million in the first half of 2021 (up $426 million increase compared to the first half of 2020). The improvement was due to favorable volumes and mix, and positive price realization, partially offset by higher material costs and SG&A and R&D costs returning to more normal levels of spend from the low levels experienced in the prior year. Adjusted EBIT margin was 3.1% in the first half of 2021.

Adjusted EBIT of Powertrain was $179 million in the first half of 2021, up $138 million compared to the first half of 2020. The increase was mainly due to favorable volume and mix, partially offset by higher freight costs and higher costs for regulatory programs. Adjusted EBIT margin was 7.1% in the first half of 2021 (2.7% in the first half of 2020).

 I HalfChange2021
adjusted
EBIT
margin
2020
adjusted
EBIT
margin
$ million20212020   
Agriculture 963 229 734 13.7% 4.8%
Construction 47 (169) 216 3.2%
(20.1)%
Commercial and Specialty Vehicles 184 (242) 426 3.1%
(6.4)%
Powertrain 179 41 138 7.1%
2.7%
Unallocated items, elimination and other (162) (142) (20) —  — 
Adjusted EBIT of Industrial Activities 1,211 (283) 1,494 7.8%
(2.8)%

The following table shows the reconciliation of Adjusted EBIT of Industrial Activities (non-GAAP financial measure), to consolidated profit (loss), for the first half 2021 and 2020.

 I Half
$ million 2021 2020
Consolidated profit (loss) 979
(1,294)
Less:
 
Consolidated income tax benefit (expense) 326
(116)
Financial services (261)
(196)
Add back:
 
Financial expenses 142
129
Adjustments:  
Restructuring costs 12
12
Goodwill impairment loss
576
Other discrete items(1) 13
606
Adjusted EBIT of Industrial Activities 1,211 (283)
(1) In the first half of 2020 this item included impairment of intangible and other long-lived assets, as well assets optimization charges.

Net Industrial debt

Excluding positive exchange rate differences effect of $235 million, Net debt at 30 June 2021 decreased by $312 million compared to 31 December 2020 mainly reflecting $0.6 billion positive Free Cash Flow of Industrial Activities, partially offset by $0.2 billion in dividends paid.

$ million 30/06/2021 31/12/2020 Change
Third party debt (1) (25,038)
(26,618) 1,580
Cash and cash equivalents 8,584
9,629 (1,045)
Other/financial asset/(liabilities)(2) 127
115 12
(Net debt)/Cash(3) (16,327)
(16,874) 547
Industrial Activities 882
297 585
Financial Services (17,209)
(17,171) (38)
(1) As a result of the role played by the central treasury, debt for Industrial Activities also includes funding raised by the central treasury on behalf of Financial Services. (2) Including fair value of derivative financial instruments. (3) The net intersegment receivable/payable balance recorded by Financial Services relating to Industrial Activities was -$10 million and $134 million at 30 June 2021 and 31 December 2020, respectively.

2021 Outlook (US GAAP)

CNH Industrial manages its operations, assesses its performance and makes decisions about allocation of resources based on financial results prepared only in accordance with U.S. GAAP, and, accordingly, its full year guidance presented below had been prepared under U.S. GAAP.

CNH Industrial expects solid demand to continue across regions and segments. In the second half of the year, increased impact of raw material and continued freight and logistics costs will be partially offset by positive price realization.

CNH Industrial is updating the 2021 outlook for its Industrial Activities as follows:

  • Net sales up between 24% and 28% year on year including currency translation effects
  • SG&A expenses lower/equal to 7.5% of net sales;
  • Free cash flow positive in excess of $1.0 billion;
  • R&D expenses and capital expenditures up slightly from previous ~ $2.0 billion.

Planned spin-off of On-Highway business

CNH industrial has confirmed its intention to enhance its customer focus through the separation of its "OnHighway" (commercial and specialty vehicles, powertrain and the related financial services business) and "OffHighway" (agriculture, construction and the related financial services business) businesses in early 2022.

The separation is expected to be effected through the spin-off of CNH Industrial N.V.’s equity interest in "On-Highway" to CNH Industrial N.V. shareholders.

Execution of the transaction requires further work on structure, management, governance and other significant matters as well as appropriate corporate approvals (including approval of the shareholders at an Extraordinary General Meeting) and satisfaction of other conditions.

CNH Industrial can make no assurance that any spin-off transaction will ultimately occur, or, if one does occur, its terms or timing.

Commercial Register No.64236277 Legal notes | Credits